Description

The Appellant having been granted Oil Mining Lease (OML) 120 by the Federal Ministry of Petroleum Resources for a term of twenty years, entered into a Memorandum of Understanding with the 1st Respondent”) for the funding, development, operation, and optimal exploration of the oil block. Under the arrangement, the 1st Respondent undertook to finance the Appellant’s operations, while the Appellant agreed that the parties would share the profits from the sale of crude oil produced from OML 120 in the ratio of 50:50. As part of the financing structure, the Appellant was required to domicile the proceeds of all crude oil sales from OML 120 into a designated collection account maintained with the 1st Respondent. The parties further agreed that the loan facilities advanced by the 1st Respondent would be repaid from the proceeds of crude oil sales paid into the account before the balance was applied in accordance with the parties’ profit-sharing arrangement.